A monetarist economist believes that
A) if the economy was left alone, it would rarely operate at full employment.
B) the economy is self-regulating and always at full employment.
C) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
D) the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.
Ques. 2In the table above, what does the private sector surplus equal?
A) 500 billion
B) 350 billion
C) 150 billion
D) 0
Ques. 3If nominal GDP is 12 trillion, the price level is 120, and the quantity of money is 4 trillion, what is the velocity of circulation?
A) 3
B) 2.5
C) 30
D) 25
Ques. 4In the figure above, real income in terms of bags of corn chips is shown by point
A) a.
B) b.
C) c.
D) d.
Ques. 5Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for 3. What is the total revenue earned by selling 180 gallons of gas?
A) 240
B) 540
C) 840
D) 3,300
Ques. 6Disney and Fox must decide when to release their next films. The revenues received by each studio depend in part on when the other studio releases its film. Each studio can release its film at Thanksgiving or at Christmas.
The revenues received by each studio, in millions of dollars, are depicted in the payoff matrix above. Which of the following statements CORRECTLY describes Disney's strategy given what Fox's release choice may be? A) If Fox chooses a Thanksgiving release, Disney should choose a Christmas release.
B) If Fox chooses a Christmas release, Disney should choose a Thanksgiving release.
C) Disney should release on Thanksgiving regardless of what Fox does.
D) Both answers A and B are correct.
Ques. 7To maximize profit, the monopolist produces on the ________ portion of its demand where ________.
A) elastic; P = MC
B) elastic; MR = MC
C) inelastic; P = MC
D) inelastic; MR = MC
Ques. 8With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________.
A) shifts upward; is unchanged
B) is unchanged; is unchanged
C) is unchanged; shifts upward
D) shifts upward; shifts upward
Ques. 9Brand name aspirin is chemically identical to store brand aspirin. Yet, consumers often prefer the brand name product to the store brand product. This preference is an example of
A) product differentiation.
B) perfect product competition.
C) oligopolistic product competition.
D) price taking behavior.
Ques. 10If a tax is imposed on buyers in a market in which supply is perfectly inelastic, the
A) buyers pay the entire tax.
B) sellers pay the entire tax.
C) buyers and the sellers both pay a portion of the tax.
D) neither the buyers nor the sellers pay the tax.
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